Gold, Retail Trader Positioning, Technical Analysis – IGCS Update
- Gold prices have climbed for another day
- Retail traders starting to turn more bearish
- Will XAU/USD confirm trendline breakout?
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![Gold Forecast](https://a.c-dn.net/b/1R2bOu/500x707Forecast-Gold.png)
![Gold Forecast](https://a.c-dn.net/b/1R2bOu/500x707Forecast-Gold.png)
Gold prices have rallied for a couple of trading sessions and retail traders have responded by increasing their downside exposure. This can be seen by looking at IG Client Sentiment (IGCS), which often functions as a contrarian indicator. With that in mind, will an increasing shift in retail exposure offer a warm welcome for the yellow metal?
Gold Sentiment Outlook - Bullish
The IGCS gauge shows that about 70% of retail traders are net-long gold. Since the majority of them are biased to the upside, this still could spell trouble for gold down the road. That said, downside exposure has increased by 9.49% and 3.59% compared to yesterday and last week, respectively. With that in mind, recent changes in exposure hint that the price trend may soon reverse higher.
Change in | Longs | Shorts | OI |
Daily | -9% | 1% | -4% |
Weekly | -12% | 18% | 1% |
![Gold Client Positioning](https://a.c-dn.net/b/3P2rZY/image1.png)
XAU/USD Daily Chart
On the daily chart, recent gains have pushed gold prices to flirt confirming a breakout above the falling trendline from May. Immediate resistance is the 1936.90 inflection point. A push above that exposes the 23.6% Fibonacci retracement level of 1971.63, opening the door to an increasingly bullish technical bias.
Otherwise, a false breakout places the focus back on the 38.2% point around 1903.46 before exposing the August swing low of 1884.37. Confirming a breakout under the latter opens the door to extending the downtrend since May.
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![How to Trade Gold](https://a.c-dn.net/b/2pg7cl/500x707HowtoTrade-Gold.png)
![How to Trade Gold](https://a.c-dn.net/b/2pg7cl/500x707HowtoTrade-Gold.png)
![image2.png](https://a.c-dn.net/b/2MJ0jT/image2.png)
-- Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com